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Design vs. Cost: Who Wins?

It's not that often that my business partner and I disagree. But I sure missed this one.
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My business partner Rolf and I agree on 99% of everything that should happen with our business. It’s that one percent of the time when things get interesting, though. 

Recently, a competitor knocked off one of our product concepts, started offering it at a lower price, and did an extremely good job of marketing it and getting lots of press. As the company that originally introduced the idea--three years ago, no less--we obviously wanted, and needed, to defend our position in the marketplace. But how to do that?

My position was that, in this case, price was the deciding factor.  Functionally, our product was very similar to that of our rival. Our customers just were being tempted by our competition because of the price. As long as we could maintain all of the functionality in our product, we just needed to make sure it came in under our competition’s price point.

Rolf, on the other hand, was adamant that not just the functionality, but also the look and the appeal were critical. Yes, price was a consideration, but in his mind, that was not the determining factor. We went back and forth on this. Thankfully, we have a skilled design team that was able to present different concepts at different price points, allowing our our entire management team to weigh in on the decision.

There has never been any doubt that Rolf and I both genuinely have the best interests of the company at heart. It’s not about personal victories, it’s about success of the company as a whole.  So how would we move forward?

Here was one hint: It became quickly obvious that the majority of our decision makers were siding with Rolf.  I couldn’t claim that Rolf had just got a bunch of yes-men and women to echo his point of view – we’re lucky not to have that kind of ridiculousness. So I had to take a deep breath, step back, and let the better-looking design move forward. Even if it was more expensive.

The results could not have been more spectacular.  For the first time in the company’s 17-year history, we have a product that prompts customers to say, “I want that. How soon can I get that?” within a minute of seeing it for the first time.  We are quoting it out and orders are coming in at a record-setting pace.  We are patenting the new design as well, so our intellectual property will be defended.

I am lucky.  I have a business partner who is not only able to stand up for his ideas, but present them in a logical, non-confrontational manner and build consensus around his concepts.  Thank you, Rolf.

IMAGE: Flickr/shutterstock images
Last updated: May 2, 2012

HANS STEEGE | Columnist | CEO, Dero Bike Racks

Hans Steege is a co-owner and the CEO of Dero, a Minneapolis-based business that builds bicycle-friendly communities worldwide. Before landing at Dero, Hans worked as an engineer in the machine design and product development industries.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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